Mr PEACOCK (Leader of the Opposition)(3.24)
—Since its election on 5 March the Australian Labor Government should have launched an assault on unemployment; it should have launched an assault on factors depressing investment; and it should have launched an assault on economic stagnation. Those targets have been quietly ignored by a government more intent on picking off the defenceless targets. The only assault the Labor Government has launched has been on both the retired and those soon to retire, on members of that sector of the community least able to adjust their lives to sudden and unexpected changes, on members of that sector of the community least able to change their earning capacities in the face of a substantial decline in their incomes.

The opposition recognises that Australia has an ageing population and that as a result there is a need for a re-examination of retirement policies as a whole in a sensitive and compassionate way. But the solution lies in encouraging individuals to provide for their own retirement and to ensure that those unable to do so are given adequate assistance. I have made these points repeatedly in recent years. In this context and in the context of welfare as a whole I have always maintained, as I said recently in the Alfred Deakin lecture:

. . . government have a responsibility to the community to ensure that those in genuine need are adequately cared for.

That is why the Opposition will repeal the proposed assets test of this Government upon our return to government. We will do so because we are committed not to ad hockery but to a considered, carefully weighed and compassionate re- evaluation of all retirement policies. That is why we have referred the consideration of all retirement policies to a Senate standing committee. Only in that way will we be able to ensure that the elderly have a secure, predictable and stable basis on which to plan their futures and that the Australian community is able to meet the burden of an aging population.

Since its election just six months ago the Government has made three major changes to retirement income policies. Those changes have not been made as part of a coherent review of retirement policies. They have been ad hoc, ill considered and totally bereft of compassion. The Government has increased dramatically tax on lump sum superannuation; it has introduced an incomes test for pensioners over 70 years of age, and it has announced the introduction of an assets test on retirement benefits as well as other benefits. None of these changes were foreshadowed during the election campaign. The Labor Party did not warn those on retirement incomes or about to retire that the price of Labor was a reduction in their living standards. It did quite the reverse. Let me read to honourable members what it promised. It promised increases in pensions. The Prime Minister (Mr Hawke) said that a Labor Government would '. . . not take money out of the pensioners' cheque'.

Mr PEACOCK
—That is right. Those commitments came from the man who is forever telling us how honest he is-Australia's most notable double dipper. Now we know that he is also the man who breaks his promises across the spectrum, but particularly those which affect those in retirement areas. Australians, particularly the elderly, will not be taken in by the Prime Minister's double talk again. Those hollow promises, which Australians believed, have of course been superceded by higher taxation and a loss of benefits. That has caused great uncertainty and insecurity amongst the elderly. So too has the manner in which the changes have been introduced. To use the words of the present Minister for Social Security (Senator Grimes) of little more than a year ago, there is:

. . . considerable anxiety and uncertainty among people who arrange their affairs under the old rules as to just what is happening.

Those old rules were first changed when, out of the blue, last May the Government announced an enormous increase in tax on lump sum superannuation. No sooner had this extraordinary and unexpected measure been announced than the Treasurer (Mr Keating) announced that it needed to be thought through a bit more . In the meantime the 1.8 million Australians suffering from the total incoherence and incompetence of the current occupant of the position of Treasurer had to sit back and wait to see whether their superannuation scheme was to be affected. They were not consulted, of course. Naturally, the Australian Council for Trade Unions was consulted.

Months later, in early August, the new scheme was announced. For some it meant that they would pay less tax on their lump sum payments than originally planned, but still much more than they would have paid previously. The major beneficiaries of these changes were those receiving over $225,000. That was not the only anomaly. Servicemen, who have to retire before they turn 55 years of age, with no surety about their futures, found they would lose 30 per cent of their total lump sum payments while those who retired and received their payments after they turned 55 years of age would have to pay 15 per cent on the first $50,000. That anomaly is still unresolved. Further talks may or may not take place. If one asks the Minister for Defence (Mr Scholes) about this at private sessions, he will say that the Government is talking about it. If one asks him publicly he will say that there are no such talks. What is the situation? The anomaly is unresolved. Is the Government seeking to resolve the situation of the defence forces? Obviously it is not. Committees may or may not be set up to look into it but the fact is that the whole superannuation saga was one of surprise and anxiety for the community and total confusion on the part of the Government.

It was reasonable to assume that, having taken a tilt at 1.8 million Australians in that unhappy episode and having broken its election promise by income testing pensions for those over 70, the Government would leave alone the elderly and those planning for their retirement. It had grabbed at their savings and undermined the incentive for thrift but that was not the end of the matter. There was more to come. Just over a fortnight after the most recent amendment to the superannuation tax was announced, the elderly were struck again. In the Budget the Treasurer announced the introduction of an assets test. On the basis of the superannuation muddle we did not seriously expect the details of this extremely complicated and inefficient measure to be announced. We did not expect the elderly to be presented with a fully comprehensive set of policies which would provide them with greater security and, of course, they were not. All they received was a stark announcement that the rules would be changed and that they would take, in the words of the Prime Minister, 'around a year to finalise'. All the elderly knew from this announcement was that they would be hurt. They did not quite know how and they still do not know when. As one pensioner spokesman said, the Federal Government wants 'to squeeze every possible ounce out of the pensioners'. As one Australian Council of Social Service representative put it:

The most objectionable feature of the assets test is that it's focused on only one group of the population, and here we have a form of capital tax on pensioners.

The assets test was abolished by the previous Government in 1976. That decision was taken for sound reasons. It was taken because the assets test was extremely complicated and costly to administer and because the then Government wanted to eliminate the inequities inherent in an assets test. Now this Government, which calls itself progressive and reformist, has decided to take a step back into history. The results are inevitable. According to the Minister for Social Security, Senator Grimes, up to 2,500 people will be needed initially to administer the assets test.

Mr PEACOCK
—Initially 2,500 people will be required to administer the assets test, obviously at enormous cost to the taxpayers. What is more serious, the assets test, like the superannuation proposals, is inequitable in its effect. That was the view of the former Leader of the Opposition.

Mr PEACOCK
—Mr Bill Hayden, who is now Minister for Foreign Affairs. He said last year that an assets test was:

. . . another kick in the teeth for aged and retiring citizens as well as half a million widows, invalids and supporting parents.

He went on to say:

The argument about millionaires receiving pensions is a cruel and emotive device to cover up the Government's real intentions . . . of ripping the pension off ordinary people with modest savings they have worked for all their lives.

The man now Foreign Minister recognised the inherent inequities in the assets test, and I am sure he still does. I am sure the Foreign Minister realises that discrimination between different sorts of assets opens up a Pandora's box of anomalies. But can the Treasurer explain why antiques, about which he knows a great deal, are exempt from the assets test while the family farm, about which he knows little, is not? Can the Prime Minister, Australia's best known double dipper, as I mentioned earlier, explain why the assets test has had to be introduced to stamp out double dipping when the higher tax on lump sum superannuation was supposed to do that? The fact is that these retirement policies have been introduced without planning, without co-ordination and, certainly, without compassion. They have been introduced for one reason and one reason only-to provide funds for the Labor Government to lavish on its ideological spending programs.

Why has the Government singled out the elderly? Why does the Government hit the elderly and the elderly alone with the only gift and wealth taxes so far introduced? Why does the Government make more pensioners pay tax by not raising the income tax threshold? Why does the Government propose to take approximately $3 a week away from the elderly, and the elderly alone, at the time of the introduction of Medicare? That policy will reduce the increase in the consumer price index by 2.6 per cent. Yet pensioners will not benefit at all from that. Instead, they will get an even smaller increase in their indexed pension with no commensurate reduction in their costs.

The Government's ad hoc, ill-considered and incompassionate changes to retirement policies will, by its own admission, hurt up to 340,000 pensioners. That figure alone is proof that the Government just does not care. The Opposition has taken a quite different and caring approach. As an interim measure we have got the Senate to agree to a Senate Standing Committee on Social Welfare inquiry into existing retirement systems which will examine comprehensively what should be done so that those who are least able to rearrange their affairs are given fair warning of any programs that political parties may wish to put before them, with particular reference to any changes which may well be necessary to ensure equitable and comprehensive income security for Australians of retirement age.

Our approach is the responsible approach. It is the coherent approach and it is certainly the compassionate approach. By contrast, this Government has abandoned the unemployed, it has abandoned the elderly and it has turned its back on Australians who gave it their trust. I go so far as to say that after having only six months of this Government, never again will those Australians of retirement age or who are about to retire be able to trust the Labor Government. In the short span of six months its callousness, contempt, incoherence and total lack of compassion will ensure that those people will review those who control government policy at the moment. Government members will be viewed as those who have treated them with deceit and callous contempt. Never again will they be trusted.